infoTECH News

[April 08, 2014]

Patent Trolls Increasingly Target Retailers

WASHINGTON --(Business Wire)--

The National
Retail Federation today urged
Congress to address an increasing threat to retailers: patent
trolls. Patent trolls are shadowy entities that purchase overly-broad
patents with the sole intent of suing retailers and other end-users of
technology that allegedly infringe on those patents.

"Trolls' claims not only affect e-commerce applications and the everyday
use of technology, but also…the storefront operations of traditional
brick and mortar retailers," NRF
Senior Vice President David French said. "Some real world
examples…cover point of sale and inventory control equipment, including;
scanning barcodes, printing receipts, the sale of gift cards, and the
connection of…a computer or printer to an Ethernet network."

French's
comments came in a statement submitted to the House Energy and Commerce
Subcommittee, which is examining patent trolls' use of
intentionally-vague demand letters - the initial letters legitimate
businesses receive accusing them of patent infringement. NRF described
how patent trolls are abusing the patent and legal systems, hampering
technological innovation, crowding the courts, inhibiting job creation,
and driving up costs for retailers and consumers alike.

"Trolls target retailers because…they are more numerous than
manufacturers and suppliers, and therefore are more profitable to the
trolls," French
said. "Trolls also know that retailers have less technological
expertise to defend the allegedly infringing products [and] operate on
thin profit margins and do not have the resources to fight back."

Retailers often settle trolls' claims rather than challenge them in
court due to the fact that the average case takes about 18 months and
costs roughly $2 million to adjudicate. In response to the growing
patent troll problem, which costs the economy $30 billion a year, NRF
supports legislative and regulatory proposals aimed at requiring
greater transparency and specificity from the trolls, and stopping the
trolls' abusive and costly behavior before the suit ever reaches a court.

French said NRF supports legislative proposals to have the Federal Trade
Commission look into patent troll demand letters under its current
authority to investigate unfair and deceptive trade practices.

NRF is the world's largest retail trade association, representing
discount and department stores, home goods and specialty stores, Main
Street merchants, grocers, wholesalers, chain restaurants and Internet
retailers from the United States and more than 45 countries.�Retail is
the nation's largest private sector employer, supporting one in four
U.S. jobs - 42 million working Americans. Contributing $2.5 trillion to
annual GDP, retail is a daily barometer for the nation's economy. NRF's This
is Retail campaign highlights the industry's opportunities for
life-long careers, how retailers strengthen communities, and the
critical role that retail plays in driving innovation. www.nrf.com.

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